Businesses now, residential customers will shift in 2020
Microwave dinners will become more expensive beginning in October 2020. That is when Southern California Edison will begin shifting all its residential customers to time-of-use electric rates. And evening electricity will cost more than lunch time.
Beginning next month, new time-of-use periods will be applied to business accounts, most of which are already on time-of-use.
The purpose of time-of-use is to shift demand from periods where electric production costs are higher to lower cost periods. SCE’s production and acquisition costs for electricity are now lower during the day than during late afternoon and early evening because of solar collection.
California produces a lot of solar energy. The best time for this is between morning and afternoon. As the sun begins to set, the solar source declines and disappears. Then, utilities must switch to more costly, traditional electric sources such as natural gas.
Consequently, the more demand that occurs when cheaper solar energy is available, the less cost to the utilities, which is why SCE is willing and wants to reduce electric rates during the day to shift as much usage as possible away from the high-cost periods.
Beginning in March, during the winter from Oct. 1 through May 31, from 8 a.m. to 4 p.m., will be the super off-peak hours for electricity costs for SCE business and agricultural customers. From 4 to 9 p.m., the rates will go to mid-peak. From 9 p.m. to 8 a.m., rates will be off-peak. This applies to weekdays, weekends and holidays.
Currently, business on-peak hours are from noon to 6 p.m. These hours change to from 4 to 9 p.m. next month.
The on-peak, or highest rates, will be applied from 4 to 9 p.m. weekdays during the summer months of June through September. The off-peak rates apply from 9 p.m. until 4 p.m. the following day.
This same pattern will be applied to residential customer rates beginning in October 2020. However, 400,000 customers were asked to volunteer for this system two years ago. So far, nearly 90 percent have retained the time-of-use rates.
Residential customers can visit the SCE site (www.sce.com/rates) to see how time-of-use would affect their rates. They have the option to choose time-of-use now, according to SCE Spokesperson Ron Gales. SCE will guarantee that during the first 12 months, no residential customer on time-of-use rates will pay more than the current tiered rate system.
Another way to gain lower rates is to agree to critical peak pricing, which businesses will be shifted to in March. This plan offers lower summer rates if the customer agrees to higher rates on 12 days throughout the year. These days will normally be the hottest expected days in the summer.
Again, this is an effort to shift demand away from high-peak usage, such as when homes, offices and businesses are all blasting air conditioning or fans. The CPP rate, which is significantly higher than normal, is only applied to electric use during the 4 to 9 p.m. period. Customers, if they sign up in advance (www.sce.com/CPPupdatecontact), will be notified a day before the CPP will be applied. The notifications can be by phone, text or email depending. It’s up to the customer.
“Business customers newly enrolled in CPP as of March 1 will receive 12 months of bill protection,” Gales wrote. This means that if the CPP rates result in a total higher cost than the current rate schedule, SCE will credit the difference.
Shifting more demand to daytime also will result in greater usage of renewable energy sources and less dependence on carbon-based sources.
The California Public Utilities Commission approved the time-of-use rate concept in 2015 and it applies to the three major electric utilities. In March 2018, San Diego Gas and Electric began shifting its customers to the time-of-use plans. SCE and Pacific Gas and Electric have until October 2020 to move all customers.
Several tests and experiments were conducted during the interim years. The results showed that customers save money, however, they also indicated that many do not actually know the cost and understand the time periods.
SCE plans a major education and promotional campaign when it begins shifting residential customers. This winter, several information brochures and letters were sent to business customers to help them better gauge the change.